{"data":{"id":"us-ky/krs-304.37-570","jurisdiction":"us-ky","citation":"KRS 304.37-570","heading":"Stock offering -- Application -- Conditions for approval -- Hearing --","body":"Filing of registration statement with Securities and Exchange Commission.\n(1) No stock offering by a mutual insurance holding company, an insurance company\nsubsidiary of a mutua l insurance holding company, an intermediate holding\ncompany subsidiary of a mutual insurance holding company, or an insurance\ncompany subsidiary of an intermediate holding company subsidiary to a mutual\ninsurance holding company shall occur without the pr ior approval of the\ncommissioner. The commissioner's approval may be obtained only through an\napplication and hearing process.\n(2) Every application for approval of a stock offering shall contain the following\ninformation:\n(a) A description of the stock in tended to be offered by the applicant, including a\ndescription of all shareholder rights;\n(b) The total number of shares authorized to be issued, the estimated number of\nshares the applicant requests permission to offer, and the intended date or\nrange of dates for the offering;\n(c) A justification for a uniform planned offering price or a justification of the\nmethod by which the offering price will be determined;\n(d) The name or names of any underwriter, syndicate member, or placement agent\ninvolved and, if known, the name or names of each entity, person, or group of\npersons to whom the stock offering is to be made who will control five\npercent (5%) or more of the total outstanding class of shares, and the manner\nin which the offer is to be tendered. If any entity or person is a corporation or\nbusiness organization, the name of each member of its board of directors or\nequivalent management team shall be provided along with the name of each\nmember of the board of directors of the offeror. Copies of any filings  with the\nSecurities and Exchange Commission disclosing intended acquisitions of the\nstock shall be included in the application;\n(e) A description of stock subscription rights to be afforded members of the\nmutual insurance holding company in conjunction with the stock offering;\n(f) A detailed description of all expenses to be incurred in conjunction with the\nstock offering;\n(g) An explanation of how funds raised by the stock offering are to be used; and\n(h) Any other information requested by the commissioner.\n(3) No application regarding a planned stock offering shall be approved unless the plan\ncontains provisions:\n(a) Requiring a majority of the members of the board of directors of the mutual\ninsurance holding company to be persons who are not interested p ersons of\nthe mutual insurance holding company or of any subsidiary or affiliated\nperson of the company. The commissioner may waive this requirement upon a\nshowing of good cause based on clear and convincing evidence;\n(b) For the mutual insurance holding c ompany to adopt articles of incorporation\nprohibiting any waiver of dividends from stock subsidiaries except under\nconditions specified in its articles of incorporation and after approval of the\nwaiver by the board of directors of the mutual insurance holding company and\nthe commissioner;\n(c) Requiring that the board of directors of any insurance company subsidiary of a\nmutual insurance holding company, any intermediate holding company\nsubsidiary of a mutual holding company, or the insurance company subsidi ary\nof an intermediate holding company shall include at least three (3) directors\nwho are not interested persons of the mutual insurance holding company;\n(d) Establishing, within the board of directors of the corporation offering stock, a\npricing committee consisting exclusively of directors who are not interested\npersons who shall have sole responsibility for evaluating and approving the\nprice of any stock offering;\n(e) Establishing, within the board of directors of the mutual insurance holding\ncompany, any insurance company subsidiary of a mutual insurance holding\ncompany, any intermediate holding company subsidiary, and any insurance\ncompany subsidiary of an intermediate holding company subsidiary to a\nmutual insurance holding company, an executive compensation committee\nconsisting exclusively of directors who are not interested persons, who shall\nhave sole responsibility for evaluating and approving compensation for\ndirectors, officers, and employees;\n(f) Establishing that for any committee of the mutual insurance holding company,\nany insurance company subsidiary of a mutual insurance holding company,\nany intermediate holding company subsidiary, and any insurance company\nsubsidiary of an intermediate holding company subsidiary to a mutua l\ninsurance holding company, at least two -thirds (2/3) of any committee having\nresponsibility for making decisions affecting capital structure or mergers and\nacquisitions shall not be interested persons;\n(g) Prohibiting officers, directors, and insiders of  the mutual insurance holding\ncompany and its subsidiaries and affiliates from the purchase or beneficial\nownership of any shares of the stock offering, or issuance of stock options to\nor for the benefit of the officers, directors, and insiders for a perio d of at least\nsix (6) months following the first date the offering was publicly and regularly\ntraded. This paragraph shall not be construed to limit the rights of officers,\ndirectors, and insiders from exercising subscription rights generally accorded\nmembers of the mutual insurance holding company, except that, in accordance\nwith any subscription rights, the officers, directors, and insiders of the mutual\ninsurance holding company and its subsidiaries and affiliates may not\npurchase or own, in the aggregat e, more than one percent (1%) of the stock\noffering for a period of at least six (6) months following the first date the\noffering was publicly and regularly traded;\n(h) For a period of two (2) years after the six (6) month period referred to in\nparagraph (g) of this section, the officers, directors, and insiders of the mutual\ninsurance holding company and its subsidiaries and affiliates may not\npurchase or beneficially own, in the aggregate, more than five percent (5%) of\nthe stock of the insurance company subsidiary of a mutual insurance holding\ncompany, an intermediate holding company subsidiary of a mutual insurance\ncompany, or an insurance company subsidiary of an intermediate holding\ncompany subsidiary to a mutual insurance holding company; and\n(i) Requiring that all members of the mutual insurance holding company are\ngranted stock subscription rights in any initial stock offering. This requirement\nmay be waived by the commissioner upon a showing of good cause at public\nhearing. For purposes of this para graph, good cause may only be found where\nthe members of the mutual insurance holding company are given rights to\nparticipate in the appreciation of the stock offered that are comparable to stock\nsubscription rights.\n(4) An insurance company subsidiary of a mutual insurance holding company, an\nintermediate holding company subsidiary of a mutual insurance company, or an\ninsurance company subsidiary of an intermediate holding company subsidiary to a\nmutual insurance holding company may issue more than one (1) class of stock if:\n(a) At all times a majority of the voting stock is held by the mutual insurance\nholding company or its subsidiary; and\n(b) No class of common stock possesses greater dividend or other rights than the\nclass held by the mutual insurance holding company or its subsidiary.\n(5) The commissioner shall hire, at the applicant's expense, attorneys, actuaries,\naccountants, investment bankers, and other experts as may reasonably be necessary\nto assist the commissioner in reviewing the application.\n(6) The commissioner shall, in the commissioner's discretion, hold a public hearing in\naccordance with KRS Chapter 13B regarding any application for approval of a stock\noffering. Upon receipt of an application for approval of a stock offering which\nincludes an initial offering of stock, the commissioner shall hold a public hearing at\nwhich all interested parties may appear and present evidence and argument\nregarding the applicant's planned offering. The commissioner shall provide the\napplicant adequate noti ce of the hearing so that the applicant can provide notice of\nthe hearing to members of the mutual insurance holding company, in a manner\napproved by the commissioner, not less than twenty (20) days prior to the hearing.\nFollowing the hearing, the commissi oner may approve, conditionally approve, or\ndeny the application. The commissioner may approve the plan if:\n(a) The offering complies with these rules and other provisions of law;\n(b) The method for establishing the price of a stock offering is consistent with\ngenerally accepted market or industry practices for establishing stock offering\nprices in similar transactions; and\n(c) The plan and offering will not unfairly impact the interests of members of the\nmutual insurance holding company.\n(7) Nothing in thi s section shall be deemed to prohibit the filing of a registration\nstatement with the Securities and Exchange Commissioner prior to or concurrently\nwith the giving of notice to members.\n(a) Notwithstanding subsections (1) to (6) of this section, a stock of fering which\nis not an initial stock offering and which offers stock regularly traded on the\nNew York Stock Exchange, the American Stock Exchange, or another\nexchange approved by the commissioner, or designated on the national\nassociation of securities dea lers automated quotations-national market system\nmay be sold if a mutual insurance holding company, an insurance company\nsubsidiary of a mutual insurance holding company, an intermediate holding\ncompany, or an insurance company subsidiary of an intermediat e holding\ncompany intends to make a stock offering which would be governed by the\nprovisions of KRS 304.37 -500 to 304.37 -580. The entity shall deliver to the\ncommissioner not less than thirty (30) days prior to the offering a notice of the\nplanned stock offering and information regarding the following:\n1. The total number of shares intended to be offered;\n2. The intended date of sale;\n3. Evidence that the stock is regularly traded on one (1) of the public\nexchanges noted in subsection (a) of this section; and\n4. A record of the trading pace and trading volume of the stock during the\nprior fifty-two (52) weeks.\n(b) The commissioner shall be deemed to have approved the sale unless, within\nthirty (30) days following receipt of the notice, the commissioner issue s an\nobjection to the sale. If the commissioner issues an objection to the sale, the\nprocedures set forth in subsection (2) of this section shall be followed to\ndetermine whether the commissioner approves the proposed sale;\n(c) Approval of a stock offering obtained under either subsection (6) or (7) of this\nsection shall expire ninety (90) days following the date of the approval or\ndeemed approval, except as otherwise provided by the order of the\ncommissioner; and\n(d) No prospectus, information, sales mater ial, or sales presentation by the\napplicant, or by any representative, agent, or affiliate of the applicant shall\ncontain a representation that the commissioner's approval of a stock offering\nconstitutes an endorsement of the price, price range, or any oth er information\nrelating to the stock.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=29959","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:56Z","sha256":"3777839670fc9b1152eed83a7551109315a81cd520d4a0de1a39b8ca63fe862c","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.37-565","next":"us-ky/krs-304.37-575"},"notice":"GroundRules: Original legal text. Not legal advice."}